Price to rent ratio (lower better?)

[Lee Melvin]

Wouldnt it be better to buy properties in places with a low price to rent area?

In other words, cheaper houses with the highest rent?

Am I off here?

[Steve Babiak]

Theoretically speaking, lower price to rent is better. But from experience, practically speaking, Dean Letfus points out some considerations that must be evaluated before determining that one would be more profitable overall with the lower priced property. Vacancy and damage have a negative effect on cash flow that can't be overlooked.